Obama plots huge railroad expansion

Railroads made Chicago, and now a Chicago-rich White House wants to return the favor: remaking rail with a huge new federal investment in high-speed passenger trains.

The $787.2 billion economic recovery bill — to be signed by President Barack Obama on Tuesday — dedicates $8 billion to high-speed rail, most of which was added in the final closed-door bargaining at the instigation of White House chief of staff Rahm Emanuel.

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It’s a sum that far surpasses anything before attempted in the United States — and more is coming. Administration officials told Politico that when Obama outlines his 2010 budget next week, it will ask for $1 billion more for high-speed rail in each of the next five years.

Yet for all the high stakes, the pieces didn’t fall into place until the end of deliberations on the recovery bill. And the way in which they did is revealing of the often late-breaking decisions — and politics — that shaped the final package.

As a candidate for president, Obama spoke of high-speed rail as part of his vision of “rebuilding America.” Campaigning in Indiana, he talked of revitalizing the Midwest by connecting cities with faster rail service to relieve congestion and improve energy conservation.

“The time is right now for us to start thinking about high-speed rail as an alternative to air transportation connecting all these cities,” he said. “And think about what a great project that would be in terms of rebuilding America.”

But the administration never emphasized high-speed rail when the House Appropriations Committee was writing its bill in January, so no money was included. The first real request came only days before the Senate Appropriations panel marked up, and the committee had to scramble to find room for $2 billion — in part by cutting other Obama priorities.

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Last week, Emanuel greatly upped the ante, asking House-Senate negotiators for $10 billion for high-speed rail — far more than either bill provided.

“I put it in there for the president,” Emanuel said in an interview. “The president wanted to have a signature issue in the bill, his commitment for the future.”

Emanuel himself was excited by the idea, but the decision to wager so much on high-speed rail reflected the fact that other candidates for a signature Obama issue were fading.

Moderate Senate Republicans, whose votes were needed, were resisting the president’s school construction initiative. Modernizing the nation’s electric grid, another White House favorite, seemed to have lost some of its cachet.

High-speed rail sailed through with surprisingly little attention paid to the president’s role.

The same Maine and Pennsylvania Republican moderates who had criticized Obama’s school construction initiative were more accepting of the rail funds, since the Northeast corridor has a major stake in more improvements. To help pay for the added cost, a business tax break — providing a five-year carry back for net operating losses — was narrowed to keep the focus more on smaller firms with receipts of less than $15 million.